Correlation Between Spotify Technology and SK Telecom
Can any of the company-specific risk be diversified away by investing in both Spotify Technology and SK Telecom at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Spotify Technology and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spotify Technology SA and SK Telecom Co,, you can compare the effects of market volatilities on Spotify Technology and SK Telecom and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Spotify Technology with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and SK Telecom.
Diversification Opportunities for Spotify Technology and SK Telecom
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Spotify and S1KM34 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and SK Telecom Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom Co, and Spotify Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Spotify Technology SA are associated (or correlated) with SK Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Telecom Co, has no effect on the direction of Spotify Technology i.e., Spotify Technology and SK Telecom go up and down completely randomly.
Pair Corralation between Spotify Technology and SK Telecom
Assuming the 90 days trading horizon Spotify Technology SA is expected to generate 1.01 times more return on investment than SK Telecom. However, Spotify Technology is 1.01 times more volatile than SK Telecom Co,. It trades about 0.17 of its potential returns per unit of risk. SK Telecom Co, is currently generating about -0.1 per unit of risk. If you would invest 69,990 in Spotify Technology SA on October 28, 2024 and sell it today you would earn a total of 5,179 from holding Spotify Technology SA or generate 7.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spotify Technology SA vs. SK Telecom Co,
Performance |
| Timeline |
| Spotify Technology |
| SK Telecom Co, |
Spotify Technology and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spotify Technology and SK Telecom
The main advantage of trading using opposite Spotify Technology and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology position performs unexpectedly, SK Telecom can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SK Telecom will offset losses from the drop in SK Telecom's long position.| Spotify Technology vs. Zebra Technologies | Spotify Technology vs. Align Technology | Spotify Technology vs. Agilent Technologies | Spotify Technology vs. CRISPR Therapeutics AG |
| SK Telecom vs. Westinghouse Air Brake | SK Telecom vs. United Airlines Holdings | SK Telecom vs. Live Nation Entertainment, | SK Telecom vs. TAL Education Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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